Honestly, I think whips are quite useful and are the most versatile of all the weapons offered in D&D.
While they may not be as "effective" in the beginning, there are Feats/Abilities available to increase their effectiveness in combat situations. I'm not entirely sure if all of those options were put into BGIII since I'm still in the beginning part of the story, but one particular feat that helps is Weapons Master. Again, I don't know if this was implemented in game or not yet, but it does give a nice bonus to damage scores on any four weapons of your choosing plus a +1-stat boost on either Strength or Dexterity. My 5th level ranger in D&D has a whip and he can do up to 10 points of damage with it.
One of the major advantages I think is the whips reach. The standard melee weapons have a five-foot reach where the whip has a ten-foot reach. It's actually really nice to have that extra five feet to work with since most enemies can't get a reaction at that distance. Plus, you can ensnare targets with the whip too. It doesn't have to be all about "How much damage can I do?" as far that goes.
Besides, it isn't completely about a weapon being effective in a fight. It's the characters stats, feats and proficiencies with a weapon that makes a difference. Granted finding magical weapons are a plus. But there are plenty of consumables and spells to imbue the weapon for additional damage.
Personally, I would like to see whips included in BGIII. There may be restrictions with creativity, but they have a lot of benefits and some of them can be added into the game mechanics.
